Economic valuation of development projects: a case study of a non-motorized transport project in India

One of the major difficulties in doing cost-benefit analysis of a development project is to estimate the total economic value of project benefits, which are usually
multi-dimensional and include goods and services that are not traded in the market. Challenges also arise in
aggregating the values of different benefits, which may not be mutually exclusive. This paper uses a contingent valuation approach to estimate the economic value of a non-motorized transport project in Pune, India, across beneficiaries. The heads of households which are
potentially affected by the project are presented with a detailed description of the project, and then are asked to vote on whether such a project should be undertaken
given different specifications of costs to the households. The total value of the project is then derived from the
survey answers. Econometric analysis indicates that the survey responses provide generally reasonable valuation estimates.

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